South Africa’s MRO capability receives a boost with big AAR deal

South Africa’s MRO capability receives a boost with big AAR deal

A new deal worth up to $125m for AAR Corporation to set up an MRO joint venture in South Africa to provide South African Airways Technical (SAAT) with component inventory management and repair services will boost South Africa’s MRO industry and increase access to Africa-based MRO services for carriers throughout the continent.

It also will help satisfy a strategic objective of South Africa’s government to extend aviation services contracts to black-owned firms that are certified as broad-based black economic enterprise (BBBEE) businesses.
 
The five-year, power-by-the-hour (PBH) deal has seen AAR set up a joint venture with South Africa-based, BBBEE company JM Aviation South Africa to support South African Airways’ fleet with nose-to-tail component and repair management. The joint venture began operations on October 1.

JM Aviation is providing day-to-day, on-the-ground account management and technical support to SAA and is working closely with AAR’s global parts supply warehouse team in Brussels.

Not only does the agreement mark a significant expansion of AAR’s aviation and supply chain services in emerging markets, but it also focuses on growing SAAT’s own MRO activities on behalf of third-party customers and airlines throughout Africa.

In part the deal will do so through AAR’s agreement to provide training in airframe and avionics MRO skills to SAAT and JM Aviation workers. This part of the contract aims to facilitate a knowledge transfer to support the growth of black-owned businesses in Africa’s aviation sector, among the fastest-growing in the world.

AAR will also provide operational analysis and technical assistance for SAAT’s MRO activities, as well as warehouse facilities and integrated IT solutions for MRO.

Additionally, AAR will support the expansion of SAAT’s component repair capabilities, including landing gear MRO. Potentially, the US company will also support a new MRO facility in West and Central Africa to meet growing air travel demand within sub-Saharan Africa and increasing international travel demand to Africa generally.

SAAT is the largest full-service MRO company in Africa. Fully FAA-certificated since the late 1980s, it is the sole provider of aircraft MRO to South African Airways, Mango and Comair/Kulula, the largest carriers in South Africa. SAAT also provides MRO services to a variety of African and other airlines. They include Air Namibia, Rwandair, TAAG, Arik Air, Trans Air Congo, Korongo Airlines, Air Zimbabwe, Air Mauritius, Air France, KLM and Turkish Airlines, as well as others.

Its market segments include major airframe checks; engine overhaul; mechanical components; avionics; and line maintenance. SAAT’s main base is at Johannesburg’s O. R. Tambo International Airport and it also services customers at Cape Town, Durban and other airports in Africa.

“Africa is a dynamic and growing market full of potential,” remarks Cheryle Jackson, recently appointed president of AAR Africa. “Working with SAAT not only is an opportunity for AAR to grow its presence in Africa; it is an opportunity for SAAT to create access to lucrative jobs and business opportunities for locals through the skills training that AAR will provide.”

AAR’s agreement with SAAT and JM Aviation South Africa represents a significant expansion for the US company in Africa. AAR recently established its first African base of operations in Johannesburg, in the process appointing Jackson as the first president of AAR Africa.

According to AAR, it has been solidifying its foothold in Africa in the past two years. The company signed its first African PBH component inventory management and repair services contract in 2014, a deal to support Kenya Airways’ fleet of Boeing 737NGs. More recently, AAR won a PBH contract from African low-cost carrier fastjet.

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